Savings and Loan Crisis
About Savings and Loan Crisis
The failure of 1,043 out of 3,234 savings and loan associations in the United States. S and Ls had been restricted to making home loans, but deregulation in the 1980s allowed them to make risky investments. Many failed due to fraud, poor management, and rising interest rates. The crisis cost taxpayers 132 billion dollars. The government created the Resolution Trust Corporation to manage failed institutions. Senator John McCain was implicated in the Keating Five scandal involving improper ties to a failed S and L. The crisis foreshadowed the 2008 banking crisis in showing how deregulation and fraud could devastate the financial system.
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